Assume that Industry A and Industry B require identical workers, involves identical tasks, and have identical non-wage benefits. Both labour markets are competitive. Currently, the hourly wage of workers in Industry A is higher than that in Industry B.
The simple model of demand and supply of labour will predict that absent any moving costs,
O a. Labour demand curve for A will shift to the right; labour demand curve for B will shift to the left; wages will be equalized across the two sectors.
O b. Labour supply curve for A will shift to the left; labour supply curve for B will shif to the right; the wage gap between the two industries will increase over time.
O c. Labour supply curve for A will shift to the right; labour supply curve for B will shift to the left; wages will be equalized across the two sectors.
O d. Labour supply curve for A will shift to the right; labour supply curve for B will shift to the right; wages will be equalized across the two sectors.